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☆ Where Have All the Foreign Buyers Gone for U.S. Treasury Debt?
▼ + stars: | 2023-11-17 | by ( Chelsey Dulaney | Megumi Fujikawa | ) www.wsj.com time to read: +1 min

Foreign FlowsBuying or selling of U.S. Treasurys from overseasChina Other central banks Private investors $600 billion 10-year average 400 200 0 -200 -400 -600 2013 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 ’22 ’23 China Other central banks Private investors $600 billion 10-year average 400 200 0 -200 -400 -600 2013 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 ’22 ’23 China Other central banks Private investors $600 billion 10-year average 400 200 0 -200 -400 -600 2013 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 ’22 ’23 China Other central banks Private investors $600 billion 10-year average 400 200 0 -200 -400 -600 2013 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 ’22 ’23 China Other central banks Private investors $600 billion 10-year average 400 200 0 -200 -400 -600 2013 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 ’22 ’23Foreigners no longer have an insatiable appetite for U.S. government debt. That’s bad news for Washington. The U.S. Treasury market is in the midst of major supply and demand changes. The Federal Reserve is shedding its portfolio at a rate of about $60 billion a month. Overseas buyers who were once important sources of demand—China and Japan in particular—have become less reliable lately.

Organizations: U.S, Foreigners, Washington, The U.S . Treasury, Federal Locations: China, The U.S, Japan

Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., November 15, 2023. The yield on the 10-year Treasury note dropped further to a two-month low on Friday and was last at 4.4082%. Most megacap stocks edged higher in premarket trading, with Amazon.com (AMZN.O) and Nvidia (NVDA.O) up 0.5% and 0.3% respectively. On the economic data front, markets will monitor the housing starts data for October, scheduled for release at 8:30 a.m. ET, Dow e-minis were up 93 points, or 0.27%, S&P 500 e-minis were up 10.75 points, or 0.24%, and Nasdaq 100 e-minis were up 6.5 points, or 0.04%.

Persons: Brendan McDermid, Russell, Mohit Kumar, Austan Goolsbee, Rick Wilmer, Shristi Achar, Maju Samuel Organizations: New York Stock Exchange, REUTERS, Dow, Nasdaq, Federal Reserve, Nvidia, Materials, Jefferies, Chicago Fed, Dow e, Old Navy, ChargePoint Holdings, Thomson Locations: New York City, U.S, Europe, Bengaluru

☆ Singapore to pilot use of wholesale central bank digital currencies in 2024
▼ + stars: | 2023-11-17 | by ( Sheila Chiang | ) www.cnbc.com time to read: +1 min

Ravi Menon, managing director of Monetary Authority of Singapore, speaks during the Singapore FinTech Festival in Singapore, on Thursday, Nov. 16, 2023. SINGAPORE — Come 2024, Singapore will pilot the live issuance and use of wholesale central bank digital currencies, said Ravi Menon, managing director of the Monetary Authority of Singapore. "I'm pleased to announce that MAS will pilot the live issuance of wholesale CBDCs to instantaneously support payments across commercial banks here," Menon said. MAS is the city-state's central bank and financial regulator. Wholesale CBDC is a digital currency issued by a central bank, that's used exclusively by central banks, commercial banks or other financial institutions to settle large-value interbank transactions.

Persons: Ravi Menon, Menon, I'm, that's Organizations: Monetary Authority of, Singapore FinTech Festival, Singapore FinTech, MAS Locations: Monetary Authority of Singapore, Singapore, SINGAPORE

☆ Morgan Stanley CEO says there's 'real progress' in the fight against inflation
▼ + stars: | 2023-11-17 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailMorgan Stanley CEO says there's 'real progress' in the fight against inflationJames Gorman of the financial services firm says despite the U.S. and U.K. central banks being late in raising interest rates, "when they got there, they really got going."

Persons: Morgan Stanley, there's, James Gorman Organizations: U.S

☆ Mastercard says wide adoption of central bank digital currencies would be ‘difficult’ right now
▼ + stars: | 2023-11-17 | by ( Sheila Chiang | ) www.cnbc.com time to read: +2 min

BARCELONA, SPAIN - MARCH 01: A view of the MasterCard company logo on their stand during the Mobile World Congress on March 1, 2017 in Barcelona, Spain. (Photo by Joan Cros Garcia/Corbis via Getty Images)SINGAPORE — There isn't enough justification for the widespread use of central bank digital currencies right now, which makes broad adoption of such assets "difficult," Ashok Venkateswaran, Mastercard 's blockchain and digital assets lead for Asia-Pacific, told CNBC. A retail CBDC, which is the digital form of fiat currency issued by a central bank, caters to individuals and businesses, facilitating everyday transactions. This is different from a wholesale CBDC which is used exclusively by central banks, commercial banks and other financial institutions to settle large-value interbank transactions. But a lot of the central banks nowadays have gotten very innovative because they are working very closely with private companies like ours, to create that ecosystem," said the Asia-Pacific lead.

Persons: Joan Cros Garcia, Corbis, Ashok Venkateswaran, Venkateswaran, Kong's Organizations: MasterCard, Mobile, Congress, Getty Images, Mastercard, CNBC, Singapore FinTech, Monetary Fund, Atlantic Council, Hong Locations: BARCELONA, SPAIN, Barcelona, Spain, SINGAPORE, Asia, Pacific, Singapore, U.S, Hong Kong

Rather, asset managers increasingly position these as now a feature of global investing choices rather than all-consuming shocks per se. Likely for the same reason, geopolitical risk monitors are at their highest in over 18 months too. Ebbing demand from a Chinese economy hobbled by property busts and a foreign investment withdrawal due to U.S. investment curbs also hurts. The VIX (.VIX) index of U.S. stock volatility is currently five points below its historic average 19 - and even July VIX futures hover on that mean. The opinions expressed here are those of the author, a columnist for ReutersReporting by Mike Dolan Editing by Mark PotterOur Standards: The Thomson Reuters Trust Principles.

Persons: there's, Washington's, Joe Biden, Donald Trump, What's, Melissa Brown, Axioma, Andrew McCaffery, Mike Dolan, Mark Potter Organizations: Bank of, Treasury, UBS Global Wealth Management, Barclays, Global CIO, Fidelity, Reuters, Thomson Locations: Ukraine, Israel, United States, India, Taiwan, Mexico, Britain, Gaza, Russia, China, Wall

☆ The Global Fight Against Inflation Has Turned a Corner
▼ + stars: | 2023-11-16 | by ( Tom Fairless | Paul Hannon | ) www.wsj.com time to read: 1 min

Inflation in the U.K. declined in October, but the Bank of England has said it is too soon to think about cutting interest rates. Photo: andy rain/ShutterstockInflation is falling faster than expected across advanced economies, marking a turning point in central banks’ two-year battle against surging prices. Declines in consumer price growth, to below 5% in the U.K. last month and around 3% in the U.S. and eurozone, are fueling expectations that central banks could take their feet off the brakes and pivot to cutting interest rates next year.

Organizations: Bank of England Locations: U.K, U.S

☆ Morning Bid: Consumers in focus as Walmart reports
▼ + stars: | 2023-11-16 | by ( ) www.reuters.com time to read: +3 min

A look at the day ahead in European and global markets from Vidya Ranganathan. Thursday's corporate calendar features a host of earnings reports that will shine further light on the health of the global consumer, as U.S. retailers Walmart (WMT.N), Bath & Body Works and Macy's (M.N) report earnings. Expectations for Walmart ride high after peer Target (TGT.N) surged by almost a fifth on Wednesday in the wake of its consensus-beating holiday sales forecast and upbeat view of its supply chain. Figures on Wednesday showed U.S. producer prices fell at their fastest pace since April 2020, and UK consumer inflation undershot all forecasts. Reuters GraphicsMeanwhile in Asia, Japan's exports are struggling due to slumping China-bound shipments of chips and steel.

Persons: Vidya Ranganathan, Eddie Wu, Christine Lagarde, Jerome Powell, What's, Joe Biden, Xi Jinping, England's Randall Kroszner, ECB's Christine Lagarde, Luis de Guindos, Fed's Loretta Mester, John Williams, Michael Barr, Jacqueline Wong Organizations: Vidya, Walmart, Body, Insider Intelligence, U.S, Bank, Events, Applied Materials, Siemens, SQM, Thomson Locations: U.S, Asia, China, San Francisco, Bath, France

☆ Fed's Williams touts need for more market data transparency
▼ + stars: | 2023-11-16 | by ( Michael S. Derby | ) www.reuters.com time to read: +2 min

“Having access to an abundance of data is a wonderful problem to have,” Williams said. “It’s important that we continue to prioritize transparency and clarity in data, especially financial market data. In separate comments for the conference, Michelle Neal, who leads the bank’s Markets Group, also touted the need for more transparency in the bond market. “I am looking forward to the increased transparency in on-the-run transaction data” industry participants are working toward, Neal said. “Looking further ahead, we should consider whether to take additional steps toward increased transaction transparency across the Treasury universe, especially for the less liquid segments of the Treasury market, such as the off-the-run market, where transparency is currently limited.”Neal noted that the off-the-run section of the Treasury market was where market issues were concentrated in March 2020, as the coronavirus pandemic sent investors thundering toward cash, upending market functioning.

Persons: John Williams, Carlo Allegri, ” Williams, “, Williams, Michelle Neal, Neal, ” Neal, Michael S, Chizu Organizations: Federal Reserve Bank of New, REUTERS, Federal Reserve Bank of New York, Treasury, bank’s Markets, Thomson Locations: Federal Reserve Bank of New York, New York, U.S

ORLANDO, Florida, Nov 16 (Reuters) - The U.S. high yield bond market is the dog that has rarely barked, never mind bitten, during the Federal Reserve's most aggressive interest rate-raising campaign in 40 years. The 'junk' bond market may also contain less junk than it used to. But changes in the composition of a leading high yield corporate bond index over recent years suggests this might be the case. "The high yield index is a higher quality index than in cycles past," reckons Bill Callahan, investment strategist at Schroders. It is now below 400 bps, and high yield bond investors are the most overweight since January, BofA's latest survey shows.

Persons: Bill Callahan, BofA's, Ashwin Krishnan, Morgan Stanley, Jamie McGeever, Marguerita Choy Organizations: U.S, ICE, Schroders, Bank of, North America, Reuters, Thomson Locations: ORLANDO, Florida

BANGKOK (AP) — Asian shares have retreated after Wall Street added a bit more to its big rally from a day before, while U.S. futures and oil prices were lower. Biden and Xi emerged from their first face-to-face meeting in a year vowing to stabilize the fraught relationship between the world's two biggest economies. Target helped lead the market with a 17.8% jump after it reported much stronger profit for the latest quarter than analysts expected. Prices at the wholesale level were 1.3% higher in October than a year earlier, and they surprisingly fell from September’s levels. That breathed more life into hopes that inflation is indeed cooling enough for the Fed to halt its barrage of rate hikes.

Persons: Joe Biden, Xi Jinping, Biden, Xi, ” Biden, Hang Seng, ’, retracing, Goldman Sachs, Praveen, Brent Organizations: Nikkei, Dow Jones Industrial, Nasdaq, Federal Reserve, Fed, U.S, Traders, New York Mercantile Exchange Locations: BANGKOK, Shanghai, Seoul, Australia, Japan, India, Bangkok, U.S

REUTERS/Kim Kyung-Hoon Acquire Licensing RightsNov 17 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist. The Asia Pacific economic data and policy calendar on Friday is very light, with only Malaysian third quarter GDP and current account reports scheduled for release. Ahead of the data the ringgit is trading around 4.6850 per dollar, near last month's 25-year low of 4.79 per dollar. Anyone hoping for market-moving news from the Asia Pacific Economic Cooperation forum in San Francisco will have been disappointed. The gathering of APEC leaders has been cordial and cooperative but, viewed through an economic and market lens, lacking any real substance.

Persons: Kim Kyung, Jamie McGeever, Joe Biden, Xi Jinping, Fed's Barr, Collins, Daly, Josie Kao Organizations: Nikkei, REUTERS, Treasury, Asia, Malaysian, Asia Pacific Economic Cooperation, APEC, CSI, Brent, Thomson, Reuters Locations: Tokyo, Japan, U.S, Asia Pacific, Asia, San Francisco, China, Malaysia

☆ Walmart CEO says food deflation may come soon
▼ + stars: | 2023-11-16 | by ( Nathaniel Meyersohn | ) edition.cnn.com time to read: +2 min

New York CNN —Lower grocery prices may soon be coming for shoppers. Food prices have increased 25% since the pandemic started. The pace of food inflation has slowed in recent months, but food prices are mostly still going up. Food prices rose 3.3% annually in October from a year ago, according to the latest reading from the Labor Department. If you think prices will go down in the future, you may delay making a lot of purchases today.

Persons: Doug McMillon, ” McMillon, CNN’s Elisabeth Buchwald Organizations: New, New York CNN, Walmart, Labor Department, Federal Reserve Locations: New York, United States, Japan

☆ Fed's Cook says economic risks two-sided, 'soft landing' possible
▼ + stars: | 2023-11-16 | by ( ) www.reuters.com time to read: +2 min

"I believe that a 'soft landing' is possible, with continued disinflation and a strong labor market, but it is not assured," Cook said in remarks prepared for delivery to a San Francisco Fed conference on Asian economic policy. "I see risks as two-sided, requiring us to balance the risk of not tightening enough against the risk of tightening too much." Meanwhile, Cook noted, other global central banks have also tightened policy rapidly. "But in a world of uncertainty it is hard to judge the exact size of these spillovers." Reporting by Ann Saphir; Editing by Paul SimaoOur Standards: The Thomson Reuters Trust Principles.

Persons: Lisa Cook, Jonathan Ernst, Cook, bank's, there's, Ann Saphir, Paul Simao Organizations: Federal Reserve, of Governors, Capitol, REUTERS, FRANCISCO, Federal, San Francisco Fed, U.S, Thomson Locations: Washington , U.S, U.S

☆ Hedge funds help fill bond-buying void left by central banks
▼ + stars: | 2023-11-15 | by ( ) www.reuters.com time to read: +2 min

Weinberg said hedge funds accounted for roughly 40% of turnover in German securities. Other debt agency officials said regulation following the global financial crisis had prompted banks to be more cautious about investing in bonds, which also left hedge funds with greater scope to buy into fixed income markets. UK debt management office head Robert Stheeman said hedge funds had moved into the space left by banks in ensuring liquidity - in other words, the ease of buying and selling an asset. Mercedes Abascal Rojo, head of funding and debt management at the Spanish Treasury, urged the need for caution, however. So far, market functioning has generally been smooth, the debt agency heads said.

Persons: Heiko Becker, Thomas Weinberg, Weinberg, Robert Stheeman, Mercedes Abascal Rojo, Spain's Abascal, Dhara, Barbara Lewis Organizations: European Central Bank, REUTERS, Bank of England, Association for Financial Markets, Spanish Treasury, Thomson Locations: Frankfurt, Germany, Ukraine, Europe's, Brussels, Central, Spain

☆ U.K. Inflation Drops Sharply, Likely Ending Rate Hikes
▼ + stars: | 2023-11-15 | by ( Paul Hannon | ) www.wsj.com time to read: 1 min

Despite cooling inflation, the Bank of England last month said it is too soon to think about cutting interest rates. Photo: daniel leal/Agence France-Presse/Getty ImagesLONDON—The U.K.’s annual rate of inflation fell more sharply than expected in October as household energy prices tumbled, the latest sign that a two-year surge in consumer prices across Europe is running out of steam as the continent’s economy flatlines. News of that decline followed Tuesday’s report of a drop in the U.S. inflation rate and added to investor confidence that the leading central banks are done raising their key interest rates—and are likely to start paring back lending rates in 2024, helping the economy. In the U.S., the inflation rate fell to 3.2% in October from 3.7% in September.

Persons: daniel leal Organizations: Bank of England, Agence France Locations: Europe, U.S

An investor looks at an electronic board showing stock information at a brokerage house in Shanghai, China July 6, 2018. REUTERS/Aly Song/File Photo Acquire Licensing RightsNov 16 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist. The economic calendar sees the release of Japanese trade data, machinery orders and the closely-watched 'tertiary activity index', as well as Australian unemployment and Chinese house prices. On the policy front, the Philippine central bank is expected to keep its key interest rate unchanged at 6.50% on Thursday, although there's an outside chance it might hike to 6.75%. Here are key developments that could provide more direction to markets on Thursday:- Japan trade (October)- China house prices (October)- Philippines interest rate decisionBy Jamie McGeever;Our Standards: The Thomson Reuters Trust Principles.

Persons: Aly, Jamie McGeever, Goldman Sachs, China's Alibaba Organizations: REUTERS, Investors, Treasury, Nikkei, Barclays, Bank of Japan, Lenovo, Thomson, Reuters Locations: Shanghai, China, Asia, Japan, Philippine, Philippines

Good news for global marketsYesterday’s impressive rally in U.S. stocks and bonds has gone worldwide this morning, as investors see central banks making gains in their fight against inflation. Adding to the good news was a breakthrough in the House last night that could avert a government shutdown. The question now is whether this represents a false dawn on inflation, or the start of a durable decline in rising costs — and interest rates. President Biden, whose poll ratings have been hurt by inflation, also cheered the numbers. And consumer spending and industrial output in China rebounded last month, a hopeful sign for the world’s No.

Persons: Biden Locations: Britain, China

LONDON (AP) — Inflation in the U.K. dropped sharply in October to its lowest level in two years largely because last year’s steep rise in domestic energy bills dropped out of the annual comparison, official figures showed Wednesday. The decline means Prime Minister Rishi Sunak's pledge to halve inflation this year has been met. Sunak made the pledge soon after becoming prime minister when inflation was more than 10%. Political Cartoons View All 1247 ImagesEarlier this month, the bank kept its main interest rate unchanged at the 15-year high of 5.25% and indicated that borrowing costs will likely remain at these sort of elevated levels for a while. Higher interest rates — which cool the economy by making it more expensive to borrow, thereby bearing down on spending — have contributed to bringing down inflation worldwide.

Persons: Rishi Sunak's, Sunak, “, ” Organizations: National Statistics, Bank of England Locations: Ukraine

☆ Want to know what Jerome Powell will do next? Here are the 10 academic journals the Federal Reserve pulls its inflation playbook from.
▼ + stars: | 2023-11-15 | by ( Mark Reeth | ) www.businessinsider.com time to read: +4 min

The key to those predictions is the Federal Reserve and the monetary policy Jerome Powell will enact next year as he fights to get inflation down to a target of 2%. Clearly, anticipating the Fed's next move is far from simple, even for Wall Street pros. While government data is clearly an important source of data for central bankers, a less-understood resource is academia. Understanding which of these resources central bankers rely on can provide insight into upcoming monetary policy moves. That way they could find the signal in all the noise and focus only on the academic journals really driving public monetary policy.

Persons: Jerome Powell, Morgan Stanley, Goldman Sachs Organizations: Wall, Business, Federal Reserve, UBS, Fed, Bank of International

☆ China c.bank boosts liquidity injection through policy loan, rate unchanged
▼ + stars: | 2023-11-15 | by ( ) www.reuters.com time to read: +4 min

A gardener works outside the headquarters of the central bank of the People's Republic of China in Beijing October 8, 2008. REUTERS/Jason Lee (CHINA) Acquire Licensing RightsSHANGHAI/SINGAPORE, Nov 15 (Reuters) - China's central bank ramped up liquidity injection but kept the interest rate unchanged when rolling over maturing medium-term policy loans on Wednesday, matching market expectations. The central bank said the loan operation was meant to maintain banking system liquidity reasonably ample to counteract short-term factors including tax payments and government bond issuance. All 31 market watchers polled by Reuters this week had expected the central bank to inject fresh funds to exceed the maturity. The most likely outcome is for PBOC to inject more support through open market operations, while leaving the MLF rate unchanged."

Persons: Jason Lee, Carlos Casanova, corporates, Xing Zhaopeng, Winni Zhou, Tom Westbrook, Christian Schmollinger, Stephen Coates Organizations: REUTERS, Rights, People's Bank of China, Reuters, AAA, ANZ, Thomson Locations: People's Republic of China, Beijing, China, CHINA, Rights SHANGHAI, SINGAPORE, Asia, UBP, United States

☆ German housebuilding is collapsing — and could drag the economy down with it
▼ + stars: | 2023-11-15 | by ( Sophie Kiderlin | In | ) www.cnbc.com time to read: +4 min

Fast forward two years, and German housebuilding looks like it's collapsing, putting pressure on both his hard-to-reach goal, but also the overall economy of the country. Over 22% of companies surveyed reported the cancellation of residential construction projects in Germany in October, a new record high. Expectations for the residential construction industry fell to what the Ifo described as an "exceptional low." "Things continue to go from bad to worse in Germany's construction sector. But it's also the jobs market that could be impacted by troubles in the homebuilding sector, Brzeski noted.

Persons: Soeren, Germany's Olaf Scholz, —, Cyrus de la Rubia, Carsten Brzeski, Brzeski, Klaus Wohlrabe, Wohlrabe, it's Organizations: Getty, Ifo Institute for Economic Research, Hamburg Commercial Bank, German Federal, Office, ING, CNBC, European Central Bank, ECB, European Commission Locations: downtown Wittenberg, Germany, Hamburg

Whatever is driving it, the sheer size of the record short positions and the pace at which they are growing suggest the reversal, when it comes, could be powerful. Leveraged funds - those more likely to be active in the basis trade - grew their net short position by 149,000 contracts to 2.08 million, a new record. Reuters Image Acquire Licensing RightsIn the two-year space, non-commercial accounts grew their net short position slightly to a new record 1.454 million contracts, and leveraged funds' net short position rose substantially to 1.716 million contracts, also a new record. A short position is essentially a bet that an asset's price will fall, and a long position is a bet that it will rise. Reuters Image Acquire Licensing RightsIf softer inflation and a more dovish U.S. central bank keep yields under downward pressure, funds' short Treasuries position is likely to come under increasing pressure too.

Persons: Dado Ruvic, Jamie McGeever, Paul Simao Organizations: REUTERS, Rights, Federal Reserve, Futures Trading Commission, Reuters, Bank of America, UST, Thomson Locations: Rights ORLANDO , Florida, U.S

A recently edgy bond market gobbled all that up. Funds' bonds allocation in November soared 18 points over the month to leave them net 19% overweight - almost 3 standard deviations above long-term averages. Asset managers' overweight bond positions - or at least those in government bonds and U.S. Treasuries - tends to be mirrored by big short positions in Treasury futures among speculative hedge funds. CFTC numbers show the scale of that speculative 'Big Short' on the flipside of the mounting 'Big Long' built by regular asset managers. Lamont points out that U.S. Treasury yields and investment grade corporate debt yields would have to rise about another 100bps for the capital losses to wipe out current yields.

Persons: Sarah Silbiger, Lazard, Ronald Temple, Lombard Odier's Florian Ielpo, Duncan Lamont, Lamont, Jason Pride, Mike Dolan, Susan Fenton Organizations: El Progreso Market, Washington , D.C, REUTERS, Bank of America's, Treasury, Reuters, Thomson Locations: Mount Pleasant, Washington ,, what's

☆ IMF says central bank digital currencies can replace cash: 'This is not the time to turn back'
▼ + stars: | 2023-11-15 | by ( Sheila Chiang | ) www.cnbc.com time to read: +2 min

SINGAPORE — Central bank digital currencies have the potential to replace cash, but adoption could take time, said Kristalina Georgieva, managing director of the International Monetary Fund on Wednesday. "CBDCs can replace cash which is costly to distribute in island economies," she said Wednesday at the Singapore FinTech Festival. CBDCs are the digital form of a country's fiat currency, which are regulated by the country's central bank. They are powered by blockchain technology, allowing central banks to channel government payments directly to households. Several central banks have already launched pilots or even issued a CBDC," the IMF said in a September report.

Persons: Kristalina Georgieva Organizations: International Monetary Fund, IMF, Singapore FinTech, Bank for International, Atlantic Council Locations: SINGAPORE — Central, Singapore

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